PSP License in Cyprus: Navigating the 2026 Regulatory Shift
Secure Your Gateway to the EU Payment Ecosystem
The Payment Service Provider (PSP) landscape in Cyprus has entered a new era. With the provisional political agreement on PSD3/PSR reached in late 2025, the Central Bank of Cyprus (CBC) now expects a “future-proof” approach. Obtaining a license in 2026 requires more than a standard application, it requires an architecture built for PSD3 readiness and the Instant Payments Regulation (IPR).
At CX Financia, we don’t just submit applications, we architect resilient payment institutions ready for the post-2027 harmonized landscape.
PSP vs. EMI: Selecting the Optimal Licensing Tier for Your Business Model
Understanding the distinction is critical for your capital efficiency. While both are regulated by the CBC, their scopes differ significantly:
2026 Strategy Note: Under the upcoming PSD3, the PI and EMI licenses will be unified into a single regime. However, the capital tiers will remain distinct. We help you choose the tier that maximizes your ROI today while ensuring a smooth “grandfathering” transition in 2027.
The CBC “Suitability Directive”: New Governance & Board Requirements
As of the latest 2025 Suitability Directives (ΚΔΠ 165/2025), the CBC has significantly increased the bar for Board expertise. We ensure your application meets these “Day 1” hurdles:
The 5-Director Mandate:
Typically requires at least 2 Executive (local) and 3 Non-Executive directors.
Local Substance:
The two Executive Directors must be Cyprus residents with proven “4-Eyes” experience in fintech or banking.
AML Board Expertise:
A designated Board member must now possess specific expertise in AML/CTF risk assessment.
DORA for Payment Providers: Securing Your Digital Operational Resilience
The Digital Operational Resilience Act (DORA) is now a live enforcement priority. Your PSP application must include:
- ICT Risk Framework: A comprehensive internal governance framework where the Board takes full accountability for ICT risks.
- 4-Hour Incident Reporting: Under CySEC/CBC Circulars, you must prove the ability to report major ICT incidents within 4 hours.
- Verification of Payee (VoP): As of October 9, 2025, all PSPs in the Eurozone must provide a service that matches the beneficiary’s name with their IBAN before a transfer is executed.
Minimum Capital Requirements (2026 Breakdown)
The initial capital must be fully paid up and blocked in a local bank account during the application review.
- €20,000: For Money Remittance services only.
- €50,000: For Payment Initiation Services (PISP).
- €125,000: For Full Payment Services (Execution of transactions, Acquiring, and Issuing).
The CBC Licensing Roadmap: From Preparation to EU Passporting
While the market average for a PSP license is 12–14 months, our Pre-Audit System aims for a 9-month window by eliminating common CBC queries before they happen.
Phase 1: The “Substance” Build (Months 1-2)
- Incorporating your Cyprus Company and recruiting the Compliance Officer and Risk Manager.
- Drafting the Program of Operations and 3-Year Business Plan including the 2025/26 Verification of Payee (VoP) technical workflows.
Phase 2: Regulatory Submission & Banking Access (Months 3-8)
- Direct liaison with the Central Bank of Cyprus.
- Safeguarding Expertise: We assist in the most difficult hurdle—opening safeguarding accounts with Tier-1 banks to hold client funds.
Phase 3: Activation & 2027 Grandfathering Preparation (Month 9+)
- Final capital injection and activation of EU Passporting notification (allowing you to serve all 27 EU member states).
Why CX Financia? Architecting High Substance Payment Businesses
Most firms treat PSP applications as a document-filling exercise. We treat it as an institutional build.
PSD3 Readiness:
We align your 2026 application with the Payment Services Regulation (PSR) standards, ensuring your business is ready for the unified regime without costly retrofitting.
We align your 2026 application with the Payment Services Regulation (PSR) standards, ensuring your business is ready for the unified regime without costly retrofitting.
MiCA Integration:
For firms handling fiat-to-crypto rails, we manage the dual-licensing overlap between
For firms handling fiat-to-crypto rails, we manage the dual-licensing overlap between
Ready to Launch Your Payment Institution?
Don’t let regulatory delays stall your market entry. Speak with our CBC licensing specialists today to determine your optimal capital tier and DORA readiness.
FAQ – Cyprus PSP Licensing
What is Verification of Payee (VoP) and is it mandatory for new PSPs?
Yes. Since October 2025, it is a mandatory requirement. Your system must be able to verify that a payee's name matches their IBAN in real-time to prevent fraud and errors.
What is the "4-Eyes" principle for PSPs?
The CBC requires that at least two experienced individuals effectively direct the business from Cyprus. They must be independent, qualified, and reside locally.
Can I use my 2026 PSP license to offer services in other EU countries?
Absolutely. Once authorized by the CBC, you can use the “Passporting” mechanism to offer services across the EEA. We handle the notification process for your target markets.